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Zimbabwe Passes Law Requiring 51 % Local Ownership

Discussion in 'International Forum' started by Akwaba, Apr 9, 2011.

  1. Akwaba

    Akwaba Senior Member

    Apr 9, 2011
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    ANALYSTS have indicated the Zimbabwe government expects China to step into the breach should the country suffer any adverse effects from its controversial indigenisation laws.
    Zimbabwe is insisting that all foreign-owned firms localise ownership at least 51 percent of their shareholdings as part of efforts to empower the previously disadvantaged black majority.
    The Chamber of Mines said it had proposed a combination of equity and credits for social investments as ways of fulfilling the requirement but these were thrown out by the government.
    “(Our) own proposals to government had been for a minimum indigenization quota of 26 percent equity, with the balance of 25 percent made up of credits arising from corporate social investments,” the Chamber said in a statement published on Friday.
    The government has since given miners up to May 9, 2010 to submit their indigenisation plans which, once approved, must be implemented within six months.
    The announcement, made last month, hit the shares of platinum producers Zimplats and Aquarius as punters sold-off on the back of mounting concerns over the policy.
    ‘‘Indigenisation should be done in a way that will achieve the twin paramount objectives of growth and development of the industry and the Zimbabwe economy and broad-based economic empowerment,’’ the Chamber of Mines added.
    Critics say the policy will likely hit companies’ expansion plans as well as deter new investment at a time the country is in dire need of foreign capital to sustain economic recovery.
    But an Africa specialist with Executive Analysis, Robert Besseling says the Zimbabwean government always had a back-up plan in the event there was an adverse effect on the economy.
    “Zimbabwe has always had a back-up plan and it has come to fruition in the last few weeks whereby they have been able to attract Chinese investment,” Besseling said in an interview with the BBC.
    “The country has a huge amount of platinum, gold as well as an un-projected amount of diamonds. So for China there is certainly a huge commercial potential especially with Western companies pulling out or being pushed out. Other countries such as India and South Korea can also move in.”
    Last month China concluded a US$700 million loan agreement with Zimbabwe, the biggest package of loans from Beijing to the mineral-rich country.

    Chinese investors have also been assured that their investments in the country would be exempt from the indigenisation laws which, government officials insist, will particularly target companies from countries that imposed sanctions on Zimbabwe.

    Besseling said although there were concerns about Chinese activities on the continent, Zimbabwean authorities felt that the country could only benefit from dealing with China since there was no chance of any meaningful investment and or budgetary support from the West.
  2. boma2000

    boma2000 JF-Expert Member

    Apr 10, 2011
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    Mugabe you are the great leader on this, but why exclude chinese, they are also foreigners??
  3. Kibanga Ampiga Mkoloni

    Kibanga Ampiga Mkoloni JF-Expert Member

    Apr 10, 2011
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    Inabidi hawape favour, kwani anawategemea mambo yakienda hovyo WAMBEBE
  4. Wit

    Wit JF-Expert Member

    Apr 10, 2011
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    Mugabe your my hero! Wachina wamembeba sana hata akiwapa feva ni haki na anaangalia mbele pia kujihami kwa lolote.